If Regulators Impose Marginal-Cost Pricing on a Natural Monopolist, the Government

question 96

Multiple Choice

If regulators impose marginal-cost pricing on a natural monopolist, the government may have to:

• A)nationalise the monopolist
• B)require transparent pricing
• C)subsidise the monopolist
• D)tax the final product

---

Definitions:

Activity-based Costing

A costing method that assigns costs to products or services based on the activities and resources that contribute to their creation and delivery.

Activity Cost Pools

Groupings of individual costs based on the activities that drive them, used in activity-based costing to allocate costs more accurately.

Batch Set-Up

The process of preparing equipment and systems for manufacturing a particular batch of products, involving calibration, cleaning, and test runs.

Activity-based Costing

An accounting method that assigns costs to products or services based on the activities they require, aiming for more accurate cost information.